tv Bloomberg Daybreak Asia Bloomberg October 19, 2016 7:00pm-8:01pm EDT
♪ >> stocks rose to a 15 month high, lifting energy producers. the biggest back-to-back gains in a month. >> top level indictments handed biggestorea's corruption investigation in years. >> trump and clinton meet again in the final presidential debate. clouds gathering over sstsubishi with a wider lo
perceived on the back of the fuel efficiency scandal. >> this is bloomberg daybreak. i am in new york, where it is just past 7:00. >> it is 7:00 in hong kong. we are seeing markets gaining the last couple of days. the dollar is about to see its worst week in two months. we are seeing momentum in asian markets. right now, the market is opened in new zealand. we are seeing some losses after a gain yesterday. the dollar is now trading at .7237. an opena, we are seeing unchanged at the moment. .5438. the australian dollar strengthening throughout the wee
k. futures in chicago, unchanged at the moment. for the last four sessions, up .2%. we have lots of market moving news, especially with what is going on in the u.s. with the third presidential debate. ramy: we are looking forward to that in the next few hours. definitely going to see some fireworks on that. positivity got some on the markets with the fed coming out with a positive outlook for the economy. oil was to the upside. who iso to oliver, looking at the stock surger. >> a little help. oil continues to move around that area. there is not this idea of stability, where things are
cascading down like last year. it is notaveat introducing to the market as much because it has been whittled down by earnings. commodities, the entire spectrum helping. you have dow jones up on the day. nasdaq tech has been a little weaker. you had earnings and the beige books, the idea the economic data is not strong enough to have the fed have a conversation about inflation. does not seem like we are going to keep hiking, which is important to the equity markets. indication we will be on this deep path for rates. shery: you mentioned earnings were in the longest profit of the session since the financial crisis.
what are we seeing? >> that we may be able to lose the title. no promises yet. we are not a third of the way through on the s&p 500. you are looking at earnings beating expectations. nes as well, but the financial aspect of the market is good. bbt did well early in the week. we saw stanley and goldman squeezing investor concerns. they like to see banks and financials in better conditions than they were. a little weakness in ebay, which was down 8% on the day. ultimately looks like we will cross that barrier and cross the hurdle into positive territory if we continue at the rate we have been going. it will hopefully be enough to actually slow the earnings recession.
shery: especially for financials. we have seen them lax on leadership. oliver, great to talk to you. let's get the first word news in new york. >> wells fargo is being investigated on whether employees created identity theft by creating prodromal -- fraudulent accounts. the attorney general is seeking the name of bankers who opened unauthorized accounts. prosecutors in new york and san francisco have open similar investigations. yahoo! is demanding more transparency from the u.s. government. theyts are alleging that built software to scan customer e-mails. they have asked for clarification on orders to internet companies. yahoo! said the recent reports on scanning activities are
misleading. fund may invest in a tech started by softbank and saudi arabia. discussed chairman the partnership during a visit to doha two diverse by the oil-based economy. need to and the saudis attract $30 billion more to hit the target. saudi arabia is trying to diversify its energy independent economy in the biggest ever bond sale by an emerging-market nation. it sold 5, 10, and 30 year securities. entrythe saudis' first into the bond market. global news powered by more than 2600 journalists and analysts in 120 countries. this is bloomberg. koreanthe sprawling
group is back in the headlines with allegations of tax evasion and breach of trust. investors may now be seeing light of the end of the tunnel. peter, how serious are these charges? going the family, it is to be a huge setback for them. it is unusual for these indictments to be levied against an entire family. it is usually the chairman of a company or top ranking official. this is all five family members at the top of the conglomerate. the scope of the indictments are significant. they range from tax evasion 80 million,o nearly $
as well as embezzlement charges totaling up to $160 million. shery: there is optimism that lotte can turn its attention to sweeping reforms. what impact will the indictments have on the company? >> the analysts we spoke to last night feel that lotte may have dodged a bullet here. remember, the attempt to arrest the chairman on charges failed. the court rejected it, saying there was not enough evidence to arrest.-- warrant an they are facing trial. analysts that looked at the charges felt if they are convicted, they may just face companiesch means the will continue to have leadership and basically be able to reorganize and continue on.
they may, lotte said revive their hotel unit ipo, which they pulled when the scandal broke. they were looking at a $4.5 billion ipo. ramy: how do analysts see this playing out? >> i think we are going to see how the market is going to react in about an our. the analysts we spoke to think there is going to be a surge in largelyfiliated stocks, because they feel there will be reforms quickly, increasing transparency, a change in governmentan -- governance. for the market, it looks like
things are back to where it should be. ramy: peter pae, thanks very much. hillary clinton and donald trump face the third and final presidential debate, trump's last chance to resurrect his campaign. et is at the university of nevada in las vegas. let's start with that bloomberg poll. >> we are talking about a nine-point lead nationally. the question for donald trump is if it is not too late. the group's most important to that gap is white male voters and noncollege educated voters. these other groups that are absolutely crucial that donald trump be able to win back if he is going to be able to turn things around in the final 20 days.
ramy: how is the format of this debate different? >> so this debate is an hour and a half, divided into six sections. there are two i would watch. one is the economy, where hillary clinton and her campaign want to put donald trump on the spot about granular details of his plan, comparing his business record with what he says he wants to do. the other is a category called "fitness to be president," where i would expect each candidate to attack the other. this is what happens when the program begins. debate, wehe last had trump have that surprise press conference. what are we expecting in the next few hours leading up to the debate? >> that is the question. we know what the questions are once the debate begins, but
there are two hours until it begins. the clinton campaign will be looking for stunts or maneuvers to put her on the spot outside the programming of the debate. we have seen reporting from breitbart, which has ties to the newp organization, about a accuser of bill clinton from the 1980's, a tv journalist, coming forward to say there was unwanted touching. if there is more to come in the next two hours, i guess the question is whether there is more to come before the programming begins that would be used to put hillary clinton on the spot. shery: margaret, some people are ,sking if it will be mild, wild or somewhere in between. thank you for joining us. our live coverage of the u.s. presidential debate kicks off at 8:30 a.m. hong kong time.
enormous opportunity in the tech industry. dell is looking at young companies down the line. >> we see plenty of opportunity, organically, to consolidate. we will continue acquisitions. alliances and partnerships are also important. we also have our ventures program, where we are investing in hundreds of companies that 48 months out. ramy: one of the world's largest food traders is expanding its presence in brazil. the singapore-based company has started trading grain in the company after relocating one of its own traders to sao paolo to focus on white sugar. it first entered brazil in 1920. state grid is
seeking to borrow $9 billion to fund investment in brazil's largest utility. it already bought a stake in the distributor last month. chinese companies are seeking to grow in brazil at a time when local businesses are struggling with the worst recession in a century. book sayslatest beige the u.s. economy has maintained moderate but steady growth, with an outlook described as mostly positive. ,he labor market remains tight with modest employment and wage growth. that has yet to lift inflation to the 2% target. there is a 17% chance of an interest rate hike at the next fed meeting. let's bring in kirk hartman, president and ceo of wells capital. let's get your reaction to the beige book. overwhelmingly positive.
any game changers? >> moderate growth is the right way to characterize the u.s. economy. expected gdp between 1.5% and 2%. the interest rate yield curve has flattened, meaning short-term interest rates have flattened while the long-term remains flat. i think we are in a moderate growth environment with low inflation. what is interesting in that environment is we have a strong dollar. toy: the forecasts are 1.5% 2%. on my bloomberg terminal, i want to show our viewers 4423. weyou look at the quarter, had a 2.8 percent forecast for growth. can these views really exist in the same reality? >> sure, they can.
it is a balance between the beginning of the year and the end of the year. we came off quite a bottom at the end of last year. oil prices were really low. oil companies were having trouble. there were areas struggling. we have seen quite a rebound in oil. theuld expect, you know, second half would probably come in at 1.5 or 2%, the average for the year. book,out of the beige they were talking about the job market being tight, but there was some slack in september. from your perspective, which side is it? >> i think wage pressures are picking up. my expectation is the fed will hike 25 basis points in december. that is not shattering, but wage pressures are tighter. we have unemployment around 5%. i think it is reasonable to
expect some rate increase later in the year. shery: i want to turn to the markets. a different view from the current seaworld and equity world. 20%re seeing volatility at below historical averages. the currency market has been unstable. usually, we see a selloff in equities. should we be exciting that? >> i do not think we should. struggle with a stronger dollar because of exports. the big sectors this year have been emerging markets up 15% and 13%, and markets up high-yield up 15%. those are good numbers considering where we are. i expect certain sectors will do well. others will be heard by a stronger dollar. stick with small caps. shery: the dollar is now heading
for its worst week in almost two months. how do you see that when you see asian currencies gaming on the back of china's gdp data? >> if you look at currencies around the world versus the dollar, they have weakened. that helps emerging-market exports. that is why you see emerging-market economies doing better. the strong dollar is going to persist if the fed tightens in december. shery: what is your portfolio allocation advice? do you go into u.s. equities, where you see low volatility, or e.m.'s, where you see higher yields? >> you want to diversify a low-vol portfolio towards value or small caps. in terms of higher octane sectors, i would recommend an allocation to higher-quality
dividend yield emerging markets, broad-based small caps. you have more area to run in 's.ms of o. -- p.e. i stated higher-quality high-yield. i would stick to the higher-quality high-yields. i would balance both volatility diversification with higher octane sector allocation. seems just quickly, it economic indicators spot trouble ahead, such as the yield curve flattening. they do not seem to be working as much given the artificial market. what are you looking at? >> i think you are right. the central banks have created misinformation in the markets. as you can tell, i am more constructive on the u.s. i am worried about europe. i think europe will continue to have volatility as a result of brexit. you have the italian elections
later in december. in areas like that, you continue to see volatility. as you mentioned earlier in the program, you also have a u.s. election. the market expects that clinton will probably win, meaning that there is a lot more knowledge as to what the policies will be. on the other hand, depending on the next couple of weeks, if there is more speculation or could be an upset, there could be concerns about volatility and trade.' shery: looking forward to that debate in a couple of hours. cio hartman, president and of wells capital management. asia forumarclay's is being held today. advisor willnomic be speaking to us at 11:10 local time.
♪ >> you are watching daybreak. i am ramy inocencio in new york. shery: i am shery ahn in hong kong. ebay is taking a tumble. it is down 7.9% after a sales forecast missed estimates. su keenan is here to breakdown results. su: coming out right before the holiday quarter and saying projected revenue and profit is maybe going to miss is not the message wall street wanted to hear.
the holiday season is dominated by amazon.com. that slammed the stock down some 8.9% in extended trading. the forecast revenue ranging to $4.1 billion at the high end. $.52 to $.54. the bright spot, revenue from stubhub, up 32%. another bright spot, they were up 5.6%, $2.2 billion revenue ahead of estimates, the third straight quarter they could increase sales. the markets are focusing on what is ahead. ramy: tell us about the holiday face-off between ebay and amazon. su: amazon has become the scary giant. ebay has been trying to reinvent itself after the split with paypal. they talked about brightening
the product mix, but they are up against amazon this fall. ramy: thank you very much. ramy: thank you very much. when you're on hold, your business is on hold. that's why comcast business doesn't leave you there. when you call, a small business expert will answer you in about 30 seconds. no annoying hold music. just a real person, real fast. whenever you need them. great, that's what i said.
shery: another cloudy and rainy day here in hong kong, where it is now 7:30 a.m. we're a half hour from the first major market open in asia. ramy: added to 7:30 p.m. here in new york, where markets closed about to 10th of a percent up. i'm ramy inocencio new york. shery: you're watching daybreak asia. u.s. stocks posted their biggest back-to-back advance and a month on the heels of better-than-expected corporate earnings, and the surge in energy producers. --w jumps to a 15 month high
crude jumped to a 15 month high. this comes after the successful opec planned cuts. chairman of a group has been indicted for embezzlement. prosecutors say his actions cost more than $150 million. they also indicted his older brother for financial crimes. prominente most figure to face trial since either team. dust 2013. presidential candidates are prior debts are preparing for the third and final debate. hillary clinton holds a 9.8% national lead over trump. this comes after donald trump salute will it -- lewd comments about women and allegations of sexual assault.
our live coverage begins in one hour. has hit thea northern philippines with wins at 260 mouth -- kilometers per hour. it is a category five storm eight kilometers wide. the philippines raised its typhoon warning to the highest warning for northern areas. schools are closed in nine provinces, and thousands of people have been moved to safety and global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. this is bloomberg. shery: thank you. asian stocks gain in the past couple days per we are seeing some pressure at the open. let us see how they are shaping up. what are you saying? it was not really a screening lead coming out of the u.s.
let me get started with the dollar-yen -- starter for a fourth straight day. this gives you a bit of an indication of what the market alike. seeing some weakness come through in australia and in new zealand. let's look at some of the movers there. oil is at a 15 month high. gains.ing mining, all the producers are being listed are saying these gains -- are seeing decent gains. we are looking at a 10th of 1% hong kong and singapore, as well as china. just to mention here, when you look at china, will be watching
the property stocks, because there is another commentary out-of-state media on the need to act decisively to weed out what they call tumors in the property market. ramy: what is the ego data -- eco-data? >> where things and jobs coming out in a couple hours time. .ong kong is due out most important would be exports out of taiwan, because it has more regional implications. that is very hard to predict. dartss a bougie game of trying to estimated -- estimate it. i think the biggest one will be china mobile in hong kong.
ramy: indonesia is also having a rate decision today, but it will not be straightforward i understand? >> it won't, simply because the banking system is dealing with raising the bad debt. the economy is split between us to -- between those two. with, banks are faced rising bad loans. keeping a close eye on australian mining stocks. they're all reporting production numbers this morning. let's head over to paul allen in sydney. paul: they're performing pretty well in the market right now, about three quarters of 1%. 5% to 43.8ts up
million tons. $13.15 per cost -- ton. tinto's shares fell 5%. they're maintaining port and rail infrastructure, so not a surprise there. $81 million for rio tinto. -- upost have a percent almost half a percent. metallurgical coal is resorting come almost doubling of the year. metallurgical coal output for rio tinto is 2.1 million tons. it is bad timing for the company bhp spun off a year back.
isallurgical coal output down third. the world's biggest supply of manganese missed estimates as well, 1.1 million tons. impactedroducers were by week oil prices -- weak oil prices. little change. crown resorts also in focus today with their annual meeting. can we expect anymore information on the staff in china? >> i'm sure there will be plenty of questions on the staff contained in china. they have not had an opportunity to meet with the 18 detained staff. a lot of the questions that the
board is likely to take from shareholders is that the share prices have taken a dive off a cliff, crown resorts lucy about 10% of their value. crown in the process of building a very impressive six start of element here in sydney aimed specifically at high rollers. there globally cracking down on the illicit love funds into gambling, this could spend bad news for crown. you so much. paul allen joining us from sydney. it has been a tough year for mitsubishi motors. they have been forced to widen their net loss forecast. how bad ising, but mitsubishi expected to be? >> it has been a bad year for mitsubishi. to have is it expected a full-year loss, but they expect that to widen to $2.3 billion.
in june, they had forecasted a loss of $1.4 billion. mitsubishi cut global car sales. you can basically see that shares have fallen more than 45% this year. in april, they really dropped off a cliff. that was around the time that mitsubishi admitted it had improperly been measuring fuel changed testator for some cars. -- test data for some cars. they could have a $360 million hit on recalls, and also -- rtunately once mitsubishi gets through the , thingsd test scandals should improve. demand globally is back up now.
they see the forecast largely based on the one factor, but does not affect the company's overall profitability and cash flow. ramy: that forecast came out after the bell. shares did jumped 7.9% yesterday . much of those higher than that's what drove those higher than -- then? >> at one point, the shares jumped more than 10%. that was on the back of a nickel report that the chairman was likely to also be chairman it mitsubishi. a 34% stake in mitsubishi. it is not a surprise to see some executive movement for it until it expected to close by the end of this year. he has a reputation for turning around ailing auto companies.
he is known to have some brutal cost-cutting techniques, but analysts are waiting to see how he can combine the start -- his time between the two. the current with division chairman may hold a press briefing later today. donald trump fired up his supporters by accusing china of stealing american jobs and manipulating the yuan -- the yen for exports. now is more sector than half of its economy. china --iticism trump's criticism of china is a bit 2000 late? donald trump's views are something of a time or -- stuck in something of a time warp.
there are no longer as much of an exporter as they once were. gdp toy need to look at see how much internal drivers .re fueling growth and spending services is more than half of the economy. there are now down to 3%, and that is projected to fall even lower. the idea that china is just exports and jobs gobbling machine that once was probably does not stand up to scrutiny anymore. the currency has weekend, but let's not forget they are intervening to keep up the exchange rate at the same time. shery: are there violent criticisms -- are there valid criticisms on china? >> china has been accused of dumping steel on the global market, causing problems around the world. it is also true to say their chief manufacturing base has -- cheap manufacturing base has
depressed jobs in america. of course, the outside world can be frustrated by china's glacial pace for reform. i think we have gotten to a point where it is much more in the world's interest to have a stable chinese economy, but equally, we need to see china pushed through the kind of reforms that will make that economy more sustainable, and therefore continuing to drive global growth, not a threat to global growth. shery: something we have been saying for years. archie economics asia correspondent. coming up next, using tech to tackle poverty. we are live at the barclays asia forum, putting the world's poor to work in the digital economy. this is bloomberg. ♪
asia's first major market opening this morning. japan has gained for the last four sessions, while futures are unchanged. you're watching daybreak asia, i'm sure young and hong kong. ramy: and i am ready it essentially new york. -- i am ramy inocencio in new york. there are exchange points in korea where note 7 owners can head of a potentially overheating phones. that extent than initially stated u.s. airports, letting travelers swap the devices before boarding planes. authorities around the world have banned the note 7 from the cabin as well as they hold. in placethe steps after the cup they failed to resolve safety concerns. shery: t-mobile will pay $48 million after failing to expose -- disclose limited data plans that were called unlimited very the fec found out that the that theuse a lab -- company allowed limited data
speeds. starbucks is pulling out the stops in china, and is expanding to more than 1000 locations next five years. starbucks currently makes about 13% of its revenue in asia. the ceo says china may eventually become a bigger market than the u.s.. the company is selling a of tea drinks -- selling a new line of teaching. -- tea drinks. shery: the berkeley asia for this they held in singapore right now. -- barclays asia forum is being held in singapore right now. >> we are referring to those who live below the poverty line. 2 billion living on less than one dollar a day.
thank you for being with us is morning. you talk about capping technology to help the poor. how do you do that? >> we connect low-income people living on less than two dollars a day to work through the internet. we are part of this emerging trends that we call impact sourcing, which is using sourcing strategies to create a measurable social impact. ruralng people in from areas to do basic tasks on the and it. these algorithms are part of some of the latest technologies like self-serving cars and smart chips and are from. >> it sounds complicated, the poor usually unskilled. how do you incorporate them into the system? have found is that there are a large number of young people, particularly in former british colonies, who finished high school, who can speak good english and read and write, but there are so few job opportunities that there is really nothing to do.
parts ofrue in rural the u.s. as well and some of the developed world, because jobs are tending to be found in the bigger cities. this is a way to connect people who, through an accident of geography, do not have a job. >> explained was your business model and how the private sector is playing a part. >> we are ironically a profitable nonprofit. in silicon valley, we are one of ,he frew intentional nonprofits and one of the few companies that is turning a profit. we set up as a nonprofit because he wanted to keep our social mission first. first and foremost, our goal is to move people out of poverty and ensure that they stay there. on average from our workers go from under two dollars a day to over eight dollars a day within a two or three or. -- three-year period. we bring them in through local ngos that we partner with in developing countries that come
to our current -- come to our centers, and they are trained to use our technology platform to do things like image tagging buried in parallel, we work with large corporations to send us their work. >> when you talk about technology, you have to talk about disruption. that is key at this point in time. that often leads to one of limit of the lower skilled people that that leads to -- on employment of the lower skilled people. >> we connect people to the digital economy. there are only two ways to do that -- either through a job or a measure like a universal basic income or cash transfer program. the beauty of the digital economy is it transcends geography. someone disconnected and living in a world area in mississippi in a rural area in mississippi timeanda can for the first
contribute directly to the global supply chain, with fairly little infrastructure, without there being roads and waterways and the other tools of industrial development that we saw in the last century. >> how do you see economies embracing digitize asian -- digitalization? 80% of people will be unemployed when automation takes place. that is a crucial factor. >> we have to admit that this is a different sort of revolution in technology than what we have seen before. i personally believe that more people will be unemployed as a result of this technological shift, which means that we need to think about paying people to do nontraditional things. i think about the new deal in the u.s. and what we did to employ people in order to boost our economy in the 40's. that paves the way for long-term prosperity in the u.s. i think government needs to realize we might need to pay people for things that have not
traditionally been economically valued, things that the care of economy. we have to think about supplements to those types of jobs, things like a basic income . in other words, just giving people an income merely for being citizens. peoples anathema to 70 best to so many people. this is a much different technological shift than what we have seen in prior eras. >> was your observation? >> in terms of the number of people who will be unemployed as a result of this shift. workersa new demand for with a different set of skills and we have had in the past. government has to respond with job training and other sorts of systems to ensure that people are employed in a new economy. we have to train people on how to take it vantage of these new digital platforms very even if we think about the gig economy,
with a thick caricom or cash care.com.test grab -- people don't have training to get a foothold in the sector. it is all about train people to have the skills they need. ramy: thank you for much. up, the philippines is hit by a second major storm in a week. we will assess the damage live from an l.a., next area -- manila.
. the best weather we have had in days. the sun is up, but it is a totally different scenario when you talk about up north. haima still sitting up in the north part of the island, with winds up to 205 kilometers per hour. , weakening.typhoon it is still causing some damages in the region. we can show you some pictures. right now, the status is still on in parts of the area around alert. there is no reported incident just yet. there have been cases in which
evacuation centers have been damaged, leaving some of the residents uncertain about their condition. ramy: this the philippines second major typhoon and in a week. how are authorities dealing with it? casualties in a number of hours, the government will be releasing a major bulletin. ramy: thank you very much for that update. please be safe as you continue to cover that. funny more still to come with asia's first major market now open in minutes. and about half an hour's time, we start our special coverage of the third presidential debate. looking for to that. shery: we're talking about this tropical storm to hit the philippines and hong kong. you guys have a political storm coming up with the third and last presidential debate. really looking forward to that. so far the asia markets right now, we're lacking clear direction after two days of gains. we're seeing new zealand gate --
>> what does your family think? david: do they think it was something wrong with us men wanting to do computers? did you ever think if your life would be better off getting a harvard degree? mr. gates: i am a weird dropout. david: as far as your relationship with steve jobs -- >> we were both there at the very beginning. david: you were the wealthiest man for 20 years more, is that more of a burden than a pleasure? >> would you fix your tie, please? david: let me move it this way. ok.